Citigroup Marketing $917M Conduit CMBS

Citigroup is marketing a $917 million commercial mortgage securitization, according to rating agency presale reports.

The deal, CGCMT 2016-P5, is backed by 49 fixed-rate loans secured by 73 properties. The loans have principal balances ranging from $2.8 million to $65 million for the largest loan in the pool, Hyatt Regency Jersey City (representing 7.1% of the pool), a 351-key, full-service hotel located in Jersey City, New Jersey.

The top five loans, which also include Plaza America I & II (6.5%), One Bethesda Center (5.6%), Easton Town Center (4.9%), and College Boulevard Portfolio (4.4%), represent 28.5% of the initial pool balance, while the top 10 loans represent 48.4%.

The deal has slightly less leverage than those of recent multiborrower transactions rated by Fitch Ratings. The overall loan-to-value ratio, as measured by Fitch, is 105.8%. However, two loans, Easton Town Center and Vertex Pharmaceuticals, have investment grade characteristics that help bring down the overall leverage; excluding these two loans, the deal’s LTV rises to 110.4%.

Kroll Bond Rating Agency puts the weighted average LTV lower, at 98.4%, which it says compares favorably to 2014 and 2015 vintage deals. However, the figure is above the average for KBRA conduits rated over the last six months of 97.2%.

Both Fitch and Kroll calculate LTV using what they view as an average value for properties across the credit cycle. This can be lower than the properties’ current valuations.

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